Will the housing market continue to recover?

Will the housing market continue to recover? Well that really depends on if jobs continue to recover. Lots of economic indicators suggest the economy is in rebound mode. For one, housing is the most affordable it has been in 20 years – this gives more people the chance to buy homes. Second, the stock market keeps reaching new highs, just last week the Dow and S&P reached two year highs and the NASDAQ reach a three year high. If the market is a precursor to an improving economy this would suggest things will continue to improve. Retail sales, another huge indicator the consumer is alive has been up for seven months in a row. People are starting to believe things are getting better so they are back spending again. The consumer drives the economy! GDP has been inching higher over the past couple of months and is expected to be up this Friday. Mortgage rates rose at the beginning of last week and declined some by the end of the week. Many believe the FED will keep rates down for the foreseeable future to make sure the economy fully recovers. The saying is “Don’t fight the FED” Have a great week and think positive!

FHA MIP Changes

On April 18th, 2011 HUD will increase the annual insurance premiums by 25 basis points.  What does that mean to home owners, higher mortgage payments.  Example:  $100,000 loan at 96.5% ltv has an MIP factor of .90 basis points which results in a monthly payment of $75.00 a month.   The new MIP for this same loan example would be 115 basis points resulting in a monthly payment of  $95.83 which is $250.00 more a year the home owners pays for mortgage insurance.

Mortgage News

Rates seem to be edging higher as the economy shows signs of improvement.  Look for a  possible 5.5% 30yr fix by summer time as QE2 whines down.